Who is Safari

SAFARI Investments RSA Limited (Safari) is a property investment company listed on the JSE as a Real Estate Investment Trust (REIT), specializing in quality commercial investments.

Our unique portfolio of assets offers investors exposure to quality rental income with sustainable growth over the long term. The company has a well-established business model and a proven track record. A sought-after premium property portfolio was established over many years.

The company is dedicated to extending its legacy of delivering sustainable income and capital growth by way of a three-pronged approach:

1. The focus area of acquisition and investment is on high-income generating property assets in strategic locations. This includes selectively investing in vacant land with development potential, as well as continuously growing and unlocking value from existing assets in high growth areas. While local locations are favoured, the board expanded its strategy to possibly diversify into Central and Eastern Europe.

2. A healthy loan to value ratio is core to our business model. Maintaining a low gearing level is prioritised to ensure that the company remains attractive to prospective investors and funding institutions.

3. The company maintains a continual emphasis on good corporate governance and strict adherence to legislation and regulations.

How We Add Value

As an income-focused REIT, Safari creates value for investors and other stakeholders by investing in quality assets and beneﬁting from active asset management based on ethical leadership and sound corporate governance principles. This results in sustainable investments generating long-term capital and income growth.

PROPERTY DEVELOPMENT AND PROCUREMENT AGREEMENT

Safari Developments Pretoria Proprietary Limited and Safari Developments Swakopmund Proprietary Limited (“Safari Developments”) are private companies which conduct the business of identifying possible commercial property for development opportunities; assessing the feasibility of such projects; procuring, if necessary, all the requirements for a successful development; and acting as project managers to complete the construction...

Why We Do It

INVESTING IN COMMUNITIES: A REVOLUTIONARY START

As recently as 2004, Soweto, for example, contained an estimated 43% of Johannesburg’s population but only some 3% of the city’s retail ﬂoor spaces. Safari was one of the ﬁrst organisations to invest in a major shopping centre located in an underdeveloped urban living area. We had a revolutionary vision and we were ready for our ﬁrst investment in Mamelodi, Pretoria. At the time, considering the needs of the community was key, and this has remained a focus point for Safari in all our subsequent investments. Strong relations with our communities are still ingrained in how Safari operates – we are deeply committed to understanding and having personal knowledge of the communities in the vicinity of our assets.

Today Safari has a strong geographic concentration in the emerging sector, in areas that were previously undeveloped and disadvantaged. Safari played a groundbreaking role in promoting quality assets that uplifted and beneﬁted these communities, and continues to do so, by establishing desirable high-end shopping and services. Each business node signiﬁcantly reduces commuting time and cost associated with travelling to regional centres. This approach also alleviates the problem of unemployment and limited tradability of properties, resulting in signiﬁcantly improved property values and opportunities for the communities in which assets are located. These locations have also been proved to offer attractive long-term rental and capital growth.

While boldly developing regional retail nodes in these areas, our awareness of the broad range of opportunities to contribute to a community grew. The initial development stage brings investment in local skills development via the developer. At commencement of trade many job and business opportunities come into being, together with the community’s sense of pride in their new and modern business node. During the operational phase people continue to enjoy access to ﬁrst-class shopping and services close to their homes. Finishes and aesthetics of Safari buildings are of the highest quality and national retailers trade extremely successfully in our centres. Trading densities continue to achieve or even surpass the national average ﬁgures every year. We find that a growing consumer middle class, assisted by rapid urbanisation and shifting demographic trends, is actively driving property demand and growth opportunities in these areas.

As recently as 2004, Soweto, for example, contained an estimated 43% of Johannesburg’s population but only some 3% of the city’s retail ﬂoor spaces. Safari was one of the ﬁrst organisations to invest in a major shopping centre located in an underdeveloped urban living area. We had a revolutionary vision and we were ready for our ﬁrst investment in Mamelodi, Pretoria. At the time, considering the needs of the community was key, and this has remained a focal point for Safari in all our subsequent developments and investments. Strong relations with our communities are still ingrained in how Safari operates – we are deeply committed to understanding and having personal knowledge of the communities in the vicinity of our assets.

Today Safari has a strong geographic concentration in the emerging sector, in areas that were previously undeveloped and disadvantaged. Safari played a groundbreaking role in promoting quality assets that uplifted and beneﬁted these communities, and continues to do so, by establishing desirable high-end shopping and services. Each business node that we created signiﬁcantly reduces commuting time and cost associated with travelling to regional centres. This approach also alleviates the problem of unemployment and limited tradability of properties, resulting in signiﬁcantly improved property values and opportunities for the communities in which assets are located. These locations have also been proved to offer attractive long-term rental and capital growth.

While boldly developing regional retail nodes in these areas, our awareness of the broad range of opportunities contributing to a thriving community grew. The initial development stage brings investment in local skills development via the developer. At commencement of trade many job and business opportunities come into being, together with the community’s sense of pride in their new and modern business node. During the operational phase people continue to enjoy access to first-class shopping and services close to their homes. Finishes and aesthetics of Safari buildings are of the highest quality and national retailers trade extremely well in our centres. Trading densities continue to achieve or even surpass the national average figures every year. A growing consumer middle class, assisted by rapid urbanisation and shifting demographic trends, is actively driving property demand and growth opportunities in these areas.

With the recent addition to our portfolio of a day-hospital in Soweto, completed in partnership with Advanced Health Limited (“Advanced Health”), we realised the opportunity to deliver even more holistic assets that combine various service offerings to serve our communities better and ultimately create value for all our stakeholders.

In general South Africa has a highly inefficient, inequitable and unsustainable spatial form. In most areas the urban complex is distributed over a large area, and residents have to travel long distances to access jobs, services and facilities.

The spatial restructuring of nodes under development is therefore of vital importance to us. It comprises the correction of overall ineffective spatial patterns so that the city and its people can function optimally and communities are served more efficiently. With this aspect in mind Safari strives towards an integrated planning approach – meaning we look at our investment opportunities in a broader context as opposed to studying site potential in isolation.

Based on this integrated approach, Safari aims to strengthen its existing retail nodes in their various locations by “re-developing” them into more holistic hubs, extending beyond retail products. We are in a position to provide other essential services to the community that also make business sense. Key to this aspect is the utilisation of available or state-owned land in the vicinity of our centres. Safari is aware that these pockets of land have the potential to be upgraded into much-needed facilities.

We are in the process of identifying the demand for schools, crèches, clinics, small-scale governmental service offices, computer services and libraries in the immediate vicinity of our developed sites. We recognise a signiﬁcant opportunity to partner with local municipalities to maximise returns, both economic and social.

South Africa is in the midst of a rapid population growth and urbanisation phase, with a growing middle class stimulating demand for retail space. With almost 2 000 shopping centres, spanning more than 23 million square metres of retail space, global peer comparisons suggest that South Africa has more retail space than demand dictates; but data proves that those shopping centres offering a broader mix (including national and international retailers, entertainment and catering/leisure) are attracting a growing number of shoppers. Township and rural centres have increased to almost 300, while the number of centres larger than 30 000 square metres increased from 36 in 1994 to 160 in 2014.

Despite a challenging macro-economic backdrop, political uncertainty, currency volatility and changing interest rates, Safari maintained an 8% average lease escalation for South African retail properties for the 2018 financial year compared to a 6% market rental growth.

Although South Africa exited a recession in 2017 economic growth is still very low and expected to remain low for the next year. From 1,3% growth in 2017 the South African Reserve Bank projects GDP growth in 2018 to be 1,5%. Consumers are under pressure due to high interest rates and inﬂation, as well as high levels of unemployment and indebtedness, translating into slowing retail sales growth.

In the current challenging economic climate, Safari is committed to strengthening its assets to their full potential and ensuring that nodes maintain their local dominance. This will restrain competitive schemes while at the same time bringing much-needed products and services directly to the people.

In order to optimise our investments, an understanding of the market’s immediate needs and demands is essential. Safari regularly conducts targeted research in the consumer markets located close to our centres. The survey findings are used as a guide in planning and managing operations with the aim of ensuring that the actual and diverse shopping and entertainment needs of the community are factored into upgrades and expansions. Through research we will continue to carefully determine how to integrate the market’s needs into our centre upgrades and our development of nearby land pockets.